Why the Court’s Decision On "Click to Cancel" Should Matter to You
Published On: July 10th, 2025
Just days before it was set to take effect on July 14, 2025, a federal appeals court struck down the Federal Trade Commission’s (FTC) “Click to Cancel” rule, which aimed to make unsubscribing from services as easy as signing up. The US Court of Appeals for the Eighth Circuit ruled that the FTC failed to follow proper procedures by not conducting a required preliminary regulatory analysis, a step mandated for rules with an economic impact exceeding $100 million annually.
What was the "Click to Cancel" rule?
The rule, finalized in October 2024, was designed to protect consumers from “negative option” marketing, where companies automatically charge you unless you actively cancel. Key provisions included:
- Easy cancellation: If you signed up online, you should be able to cancel online without talking to a sales rep
- Clear disclosures: Companies had to disclose billing terms, trial periods, and cancellation steps upfront
- No tricks: Bans on misleading tactics, like hiding cancellation links or requiring lengthy phone calls
The FTC reported receiving 70 complaints per day in 2024 about unfair subscription practices, up from 42 in 2021.
Who supported and opposed the rule?
The "Click to Cancel" rule sharply divided regulators, businesses, and advocacy groups. On one side, consumer advocates and FTC Chair Lina Khan championed the rule as a necessary shield against predatory practices, arguing it would "save Americans time and money" by ending endless cancellation hoops. The Biden administration backed it as part of its "Time is Money" initiative, targeting junk fees and consumer hassles.
Meanwhile, business groups like the US Chamber of Commerce and telecom giants (Comcast, Disney, etc.) sued to block the rule, calling it a regulatory overreach that would burden companies with costly compliance. The FTC’s Republican commissioners, including now-Chair Andrew Ferguson, opposed it, voting against the rule and later delaying enforcement—a move critics blamed for enabling the court’s eventual rejection.
What this means for consumers
The court’s decision leaves consumers vulnerable to the very practices the rule sought to fix. Without federal enforcement, companies can continue making cancellation harder than sign-up, forcing customers into lengthy phone calls, hidden opt-out links, or retention offers. While some businesses like Netflix have already streamlined cancellations, others (e.g., cable providers) may revert to obstructive tactics.
However, state laws in places like California and New York still mandate easy cancellations, and attorneys general like Letitia James have penalized companies like Equinox and SiriusXM for trapping customers. The FTC could appeal or restart the rulemaking process, but with a Republican-led commission, immediate action is unlikely.
Why should you care?
- Your wallet: Unwanted subscriptions drain billions annually. The FTC cited examples like gym memberships and streaming services
- Your time: Imagine spending 30 minutes on hold to cancel a service you signed up for in 30 seconds
- Your rights: The fight isn’t over. States and Congress could push similar rules, and the FTC may revisit this under future leadership
Pro tip: Stay vigilant by checking bank statements for recurring charges, using virtual cards (e.g., Privacy.com) to limit auto-renewals, and reporting unfair practices to the FTC or state attorneys general.
The bottom line
The court’s decision is a win for businesses that rely on recurring revenue from forgetful or frustrated consumers, but a loss for transparency. While the rule’s future is uncertain, the backlash has spotlighted a pervasive issue: companies shouldn’t profit by making quitting harder than joining. For now, consumers must stay vigilant or risk paying for services they no longer want.